JAGDISH DATTATRAYA PETKAR ,PUNE vs. ITO WD-3(3) , PUNE

The brief facts of the case are that, the income tax department has received information ITS data that the assessee has made a cash deposits of Rs. 10,60,000/- and time deposits of Rs. 75,30,983/- in the bank. Further as per ITS data and TDS return, the assessee was in receipt of income subject to TDS under section 194A, 194C, 194I and 194J aggregating to Rs.1,58,33,782/- in the F.Y.2011-12 and the assesse has not filed the return of income for the A.Y. 2012-13. The Assessing Officer has reason to believe that the income has escaped assessment and fallowed the due process of law and issued notice u/sec148 of the Act on 31.03.2019 and the assessee has filed the return of income in compliance to the notice on10.05.2019 disclosing a total income of Rs.15,29,570/- and the assessee was provided reasons recorded. Subsequently, notice under Section 142(1) of the Act was issued to the assessee to submit the details in respect of the cash deposits and various business transactions. During the assessment proceedings, the assessee has explained that the assessee is carrying contract works with the Indian Railway, Indian Navy and other companies and the income has been offered. The A.O. has considered the facts and details submitted and made addition of Rs.20,00,000/- towards the term deposits and Rs.5,30,000/- as unexplained cash deposits and finally passed the assessment order u/sec143(3) r.w.s147 of the Act determining the total income of Rs.42,84,070/- vide order dated 13.11.2019. 3. Subsequently, the Pr.CIT on perusal of the records and information found that, the order passed by the AO under section 143(3) r.w.s 147 of the Act is erroneous and prejudicial to the interest of the revenue and set aside the order and accordingly issued directions to the Assessing Officer to make necessary enquiries and pass assessment order vide revision order u/sec 263 of the Act. The A.O as per the directions has issued notice u/sec142(1) of the Act on the assessee to submit the details of sources of fixed deposits made with the bank and sources of cash deposits. Further the A.O has issued notice u/sec133(6) of the Act on the central bank of India, whereas the A.O in the absence of clarifications from banks on the fixed deposits made addition of unexplained investment u/sec69 of the Act of Rs.71,05,096/-(ii) similarly, in the case of deposit with federal bank , the assessee could not explain the cash deposit made for making the fixed deposit of Rs.4,00,000/- and made addition u/sec69 of the Act and (iii) further the A.O found that the assessee could not substantiate the cash deposits made out of cash withdrawals from banks and in the absence of proper evidences, the A.O made addition of unexplained cash under 69A of the act of Rs.17,28,000/- and assessed the total income of Rs.1,07,62,666/- u/sec147 r.w.s263r.w.s144B of the Act dated 31.03.2022. 4. Aggrieved by the order, the assessee has filed the appeal with the CIT(A). Whereas the CIT(A) has considered the grounds of appeal, statements of facts, submissions, finding of the AO and remand report but has sustained the addition in respect of term deposits to the extent of Rs.26,52,548/- and sustained the addition of cash deposits and partly allowed the assessee’s appeal. Aggrieved by the order of the CIT(A), the assessee has filed the appeal before the Hon'ble Tribunal.

At the time of hearing, the Ld.AR submitted that the CIT(A) has erred in partly sustaining addition of fixed deposits overlooking the facts that there are no fresh sources of fixed deposits and the earlier fixed deposits are matured and renewed in this F.Y.2011-12 and the CIT(A) has not considered the facts that the deposits in federal bank account are out of withdrawals and in respect of other cash deposits, the CIT(A) has overlooked the sources and transactions of withdrawals and deposit are out of multiple bank accounts maintained by the assessee. The Ld.AR submitted that the assessee has a good case on merits and shall substantiate with material evidences and prayed for allowing the appeal and relied on the factual paper book. Per contra, the Ld. DR supported the order of the CIT(A).

We heard the rival submissions and perusal of the material available on record. The sole crux of the disputed issues envisaged by the Ld.AR that the CIT(A) has erred in partly sustaining addition in respect of fixed deposits, whereas the Ld.AR explained that the deposits made in the earlier year are renewed in the said F..Y2011-12, further the revenue authorities have disregarded and overlooked the facts of renewal of fixed deposits and assumed that they are not accounted. The Ld.AR demonstrated the letter from central bank of India that the deposits are renewed in the F.Y.2011- 12 are old fixed deposits matured placed at page17 &18 of the paper book. Prima facie, the facts of renewal of old deposits are not disputed. Accordingly, we set aside the order of the CIT(A) on this disputed issue and direct the Assessing officer to delete the addition of Rs.26,52,548/-.On the second disputed issue, of cash deposit of Rs.4,00,000/- in the federal bank, the explanations of the Ld.AR are that the cash deposits are out of withdrawals from Union Bank and referred to the chart of deposits and withdrawals placed at page 43 of the paper book. The Ld.AR contentions are the source of withdrawals are out of current year income and savings. We find the submissions are supported with evidences and we direct the Assessing officer to delete the addition of Rs.4,00,000/- On the third disputed issue of addition of Rs.17,28,000/- the Ld.ARs contentions are that cash deposits are withdrawals from multiple bank accounts and cash in hand, we find these facts need to verified with the evidences and bank statements claimed by the assessee placed at 45 to 68 of the paper book. Accordingly, We consider it appropriate to restore this issue to the file of the Assessing officer to verify and adjudicate afresh on merits and the assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information. And, we allow these grounds of appeal of the assessee for statistical purposes.

In the result, the appeal filed by the assessee is partly allowed for statistical purposes.

The Pr. CIT concerned. 4. तिभागीयप्रतितिति,आयकरअिीिीयअतिकरण, “A” बेंच, पुणे/ DR, ITAT, “A” Bench, Pune. गार्डफ़ाइि / Guard File. 5. //y//